Feb 20, 2024

Australian Crop Update – Week 7, 2024

2023/2024 Season (New Crop) – USD FOB

NEW CROP PRICES ARE BASED ON TRACK BID/OFFER SPREAD PLUS ACCUMULATION & FOBBING COSTS AND ARE NOT FOB PRICE INDICATIONS.

New Crop - CFR Container Indications PMT

Please note that we are still able to support you with container quotes. However, with the current Red Sea situation, container lines are changing prices often and in some cases, not quoting. Similarly with Ocean Freight we are still working through the ramifications of recent developments on flows within the region – please bear with us.

Please contact Steven Foote on steven@basiscommodities.com for specific quotes that we can work on a spot basis with the supporting container freight.

Australian Grains Market Update

Australian domestic grain markets fell in all port zones over the week. The biggest declines were seen in the northern areas on the east coast where farmers and traders are struggling for homes within the domestic market and the absence of export demand. The feed wheat market was down USD18 per metric tonne (/MT) for the week as longs finally came down to levels to uncover fresh consumptive interest.

Barley was also pressured lower, but not to the same extent as wheat due to northern barley suppliers remaining tight. Exporters have had little interest in buying at these levels from farmers as they struggle to garner export interest. Prices however are falling where we could see more exports. Overall, demand is soft and when it does emerge it's only for nearby needs.

Nearby demand is more intent on swapping supplies to more efficient export execution locations rather than adding to length, which is expected to reflect the lacklustre demand seen from Asian wheat importers. The same is said for barley which had previously been supported by the large China sales and the advanced export pace.

Ocean Freight & Shipment Stem Update:

Lacklustre shipping stem additions in the past week is offering support for exporter prices. Only 356 thousand metric tonne (KMT) of wheat was put onto the stem in the past week compared to the 4-week average of 532KMT. This included 189KMT in WA and 117KMT in VIC as well as 50KMT in Port Kembla, New South Wales (NSW). There was 106KMT of canola put on the stem which included 76KMT in WA and 30KMT in South Australia (SA). There was also 85KMT of barley put onto the stem made up of 60KMT in WA and 25KMT in SA.

Houthi rebel attacks on the Red Sea have led to Suez Canal revenues dropping by half in January. The major shipping companies have chosen to divert their vessels away from the Red Sea and the Suez Canal. Income at Suez Canal has dropped from $804 million in January 2023 to $428 million in January 2024, according to the Suez Canal Authority. The total number of vessels transiting through the Suez Canal dropped from 2,155 to 1,362 in the same period. Many carriers have re-routed vessels to the longer and more expensive route round the Cape of Good Hope. The Suez Canal offers the shortest route between Asia and Europe. Charter rates are rising as owners become more bullish and are pushing for higher-than-last-done levels across segments and regions.

Australian Weather:

More general rain fell across northern Australia last week which is supporting the summer crop outlook. Most forecasters are coming around to the view that the sorghum crop may be significantly larger than early projections. We expect the crop will come in north of 2.1 million metric tonne (MMT) which will demand large exports into China. The long term weather outlook for the winter wheat, barley and canola crop looks favourable with general rains across the growing areas of Australia. Last week saw a heat wave across VIC and Northern NSW with temperatures exceeding 42 degrees for much of the week. This week looks favourable again with showers expected in WA and the eastern states.

8 day forecast to 26th February 2024
Source: http://www.bom.gov.au/

Weekly Rainfall to 19th February 2024
Source: http://www.bom.gov.au/

AUD/USD Currency Update:

The Australian dollar was weaker to close last week when valued against the USD trading at 0.6494. The AUD attempted to move into positive territory after trimming intraday losses early last week. Australian employment was surprisingly weak in January, while the jobless rate climbed to a two-year high in another sign the labour market was loosening in the face of a slowing economy and subdued consumer demand.

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Basis Commodities expands service offering to soybeans.

18 Apr, 2024

In late 2023, Basis Commodities successfully executed its first shipment of premium non genetically modified soybeans from Romania to Egypt, via two small vessels. Basis has many years of experience managing trade flows and relationships within the Middle East and we were pleased when the opportunity to add a new product – Soybeans – arose out of discussions with our suppliers in Romania and buyers in Egypt. To ensure the safe arrival of the produce, the company worked with several parties to facilitate the execution of this new flow for the company including managing due diligence, testing, insurance and contract execution. Soybeans are a primary source of protein and edible oil, making them essential for human nutrition. The largest producers of soybeans in the world are the United States, Brazil, and Argentina. These countries account for most of the global soybean production. Ukraine is the leading exporter of soybeans in Europe. However, Romania is seeing growth in this market after a long hiatus. This growth can be attributed to various factors including increased demand for soybeans globally, improvements in agricultural technology, and favourable climatic conditions for soybean cultivation in Romania. Egypt is among the top importers of soybeans in the world. The country imports large quantities of soybean, primarily for the production of soybean meal, a key ingredient in animal feed formulations. The country's growing population and expanding livestock sector contribute to the increasing demand for soybeans as a source of protein-rich feed. Basis Commodities General Manager in Dubai, Nader Ahmed said assisting companies making connections in the movement of soft commodities is a speciality of the company “we are committed to fostering international trade partnerships and promoting the exchange of quality agricultural products in the Middle East” and “We’re proud to have played a role in bringing premium soybeans into Egypts market”. For more information on how Basis Commodities and assist your business, reach out to the team on the details below